W/C April 18th - Nova are currently sending out P60s. If you receive one, please keep it for your records.
CHANGES TO EXPENSES LEGISLATION FROM FRIDAY 8TH APRIL
You might be aware that in 2015 HMRC and HM Treasury consulted with our industry and employment agencies about restricting allowable expenses for travel and subsistence. Further to this consultation, they decided to bring these measures in and it is with regret that we have to inform you that they come into force from next Wednesday 6th April.
In the lead up to the publication of the Finance Bill last Thursday, everything had pointed to the fact that if you operate like you do as a Personal Service Company (PSC) you were not going to be caught by the new expenses rules and you would be able to make your claims as usual.
However, last minute changes were made which were not expected. Since then we have been carefully studying the wording and consulting our tax advisers and we are pleased to advise you that the changes don’t have the negative impact that many were expecting.
Things have changed though, so from April 6th, as a PSC worker subcontracted by Nova, if you wish to claim mileage expenses, you have to prove that you're not under supervision, direction or control (SDC), or the right to supervision, direction or control.
The good news is that the new rules only cover travel and subsistence to and from your workplace. You can still claim for the cost of meals incurred whilst on the road and other expenses such as PPE and necessary expenses incurred in the performance of your duties.
Also, if you can provide us with reasonable evidence that you're not under supervision, direction or control, then you can still claim the mileage as before. That evidence would need to come from you or your recruitment agency, or the end client and if your agency is willing to provide this confirmation, it is vital for them to check all contracts in the chain to ensure there is no SDC clause.
Will I be worse off?
We have some good news to give you here. The new tax year starts next Wednesday on April 6th which means the directors Annual Earnings Period (AEP) resets with the result that you will pay no National Insurance Contributions (NICs) at all until your taxable earnings reach approximately £8,060. So, from next Friday it’s highly likely that you will in fact be better off even if you submit no expenses at all.
Please do not hesitate to contact us if you have any questions or concerns on this issue, but we hope the following is a helpful guide on the changes:
- PSCs subcontracted by Nova are affected by the changes and therefore mileage claims to and from home and the worksite are no longer allowable unless you provide us with a document which states there is no SDC anywhere else in the chain or any SDC in practice.
- All other allowable expenses such as receipted subsistence incurred once you have left the worksite for the day remain allowable.
- The new tax year means the new Directors AEP. In all but the cases where the travel expenses are the highest, you will for the next 18-20 weeks see an increase in pay compared to what you have received recently.
- We are working hard to see what other options are available and are confident that we will be able to offer you a long term solution which continues to provide you a benefit to providing your services in this manner.
Don’t forget, there’s still a big benefit to working through Nova!
If you have any questions whatsoever, please don’t hesitate to contact us.
- Amendment to laundry claims, itemised receipt now required
- Goodbye to ID & Drivers Licence requests! Click here
Calculation of National Insurance Contributions
From Friday 10th April, it is possible that you might notice an increase in your take-home pay.
This is as a result of commencing the new tax year and the way that National Insurance Contributions (NICs) are treated for directors of their own limited companies.
From now, until your taxable earnings reach £8,060 you will not have to pay any NICs. Once over this limit, you will pay NICs as you do at present.
For a contractor invoicing £500 per week with £100 expenses, this means potentially an extra £30 per week for up to 20 weeks!
If you have any questions about this, please do not hesitate to contact us.
Nova Accountancy fees
As you know, Nova Accounting charges a £10 per payment fee for handling all your limited company administration and processing expenses.
We wanted to let you know that from Friday 10th April, this charge will be more visible on your payslip. We have listened to comments that previously this cost was not made clear enough, so we hope you find the change helpful.
Welcome to Nova Accounting
Welcome to Nova Accounting – a specialist provider of accounting and business administration services tailored to the requirements of sole trader businesses.
We have a wealth of experience in handling the tax and accounting requirements of self-employed workers and can provide you with a tailored service, which leaves you to concentrate on doing your business.
Becoming self-employed can feel a bit daunting, but we're here to make things straight forward!
If you are new to self-employment and operating as a sole trader for the first time, then help is at hand to guide you through the process from registering with HMRC for self-employment, to dealing with your tax each week, VAT, right the way through to completing your self-assessment.
Please have a look at the services we provide to see how we can help, and if you'd like to discuss in more detail, then call our customer services department who will be able to help with any queries you may have.
We look forward to hearing from you soon!